Pages

Thursday, April 14, 2011

A new report reveals that the federal government was underestimating the number of employers that self-fund employee health benefits. Now, with healthcare reform, their numbers are set to grow.Risk & Insurance OnlineBy JULIE LIEDMAN, a freelance writer who lives in Philadelphia

According to the DOL report, about 12,000 health plans filing a Form 5500 for 2008--the latest year for which complete data is are available--were self-insured, and 5,000 mixed self-insurance with insurance. Self-insured plans covered 22 million people, while mixed plans covered 25 million. Health benefits plans covering private-sector employees must file the form if they cover 100 or more participants or hold assets in trust. Because many self-insured health plans do not meet the filing requirements and therefore haven't filed the form, however, the total number of self-insured plans probably is underestimated. The DOL report acknowledged this, …
"We expect a larger interest in self-insurance than ever before when additional regulations such as exchanges, 'pay-or-play' and vouchers go into effect (by 2014)," said Mike Ferguson, chief operating officer of the Self-Insurance Institute of America.
By 2014, PPACA requires that health insurance be more affordable and easier to purchase for small businesses and individuals through statewide exchanges. Employers with 50 or more full-time employees must either provide specified minimum levels of coverage to their employees or pay an excise tax. This is referred to as "pay or play."…
Smaller employers may find it financially advantageous to pay for their own firm's risk than to be subject to the new provisions.

Image via WikipediaPurchasing a plan through the exchange, for instance, where premiums will be a function of the broader risk pool and subject to risk adjustment, could be costly, Ferguson said. If enough small firms with healthier enrollees opt out of a state's small-group market in 2014, that state exchange could experience adverse selection.